Thursday February 7 2019, Weekly News Digest

origination costs

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. LendingPoint increases mezzanine financing. UK publishes Open Banking operational guidelines. Raisin raises $114M. Today’s main analysis: International P2P lending volumes for January 2019. Today’s thought-provoking articles: Where are we in the credit cycle? Marketplace lending associations respond to FDIC small dollar lending rule request. […]

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

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News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-1 (“SCLP 2019-1”). This is a $480.7 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1

Class Preliminary Rating Class Principal
A AAA (sf) $351,800,000
B AA+ (sf) $39,400,000
C A+ (sf) $51,500,000
D BBB (sf) $38,000,000

Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA

This week’s big funding news was that digital savings and investing platform Acorns raised $105 million in its Series E round, bringing its total valuation to $860 million.

The US economy generated 304 k jobs in January, marking a record 100 months of job growth. Average hourly earnings rose by 3.2% and the unemployment rate rose slightly to 4%.

Marlette CEO Jeff Meiler discussed profitability and loan performance with Peter Renton (transcript and podcast here).  Marlette announced another year of profitability in 2018.

Prosper’s December Performance Update showed that Prosper is focusing on making higher grade loans with 62% of December originations rated AA-B.

Overall, lenders view the US consumer as healthy and the US economic growth as solid.

The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA

So, back in November the FDIC issued a Request for Information on Small Dollar Lending. They received more than 60 responses from banks, industry associations, non-profit groups, fintech companies and individuals. While the FDIC did not define exactly what they meant by a small dollar loan the respondents, for the most part, took it to mean loans of less than $5,000.

There are many mainstream online lenders offering personal loans down to $1,000 and there are also many fintech companies offering loans under $1,000. Companies like Oportun, Insikt, LendUp, Elevate, Opploans and many others offer these sub-$1,000 loans using the latest technology tools to make this process more efficient.

The Marketplace Lending Association (MLA) provided a detailed 10-page response where they urged the FDIC (and other regulators) to do more to support banks and foster closer working relationships with fintech providers:

The Online Lenders Alliance is a trade group that contains many small dollar lenders who operate online. Not surprisingly they are against the 36% rate cap but they also have a lot in common with their sub-36% brethren such as promoting partnerships between banks and fintech companies.

Source: Online Lenders Alliance

The Center for Responsible Lending gave one of the most detailed responses to the RFI, a full 38 pages.

Read the full Online Lenders Alliance response here.

LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA

LendingPoint, the consumer lending platform, announced it closed an increase of its mezzanine financing, bringing the total of the facility to $67.5 million. A Paragon co-investor joined the facility as a lender.

Today’s announcement is the latest in a string of financing transactions LendingPoint has closed in the past 15 months. The company secured an up to $500 million Senior Credit Facility in August 2017 and an up to $600 million Senior Credit Facilityin May 2018, both arranged by Guggenheim Securities.

Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA

1. BankMobile — Hooked Up With T-Mobile

Parent Company: Customers Bank
Websitewww.bankmobile.com
Launched: 2015
Category: Mobile bank

The creation of father-daughter team of Jay and Luvleen Sidhu (CEO and President respectively), BankMobile is an evolving banking-as-a-service platform.

2. Chime — Super Slick App

Websitewww.chimebank.com
Launched: 2013
Category: Mobile banking and money management app (in partnership with the The Bancorp Bank)
Notable Milestone: 2 million account relationships

3. Finn — Chase Bank’s Millennial Play

Parent Company: JPMorgan Chase
Websitewww.chase.com/personal/finnbank
Launched: 2017
Category: Mobile bank

Chase is offering a $100 for opening a new Finn account (as long as you make ten qualifying transactions in the first 60 days).

4. Marcus — Sucking Up Your Customers

Parent Company: Goldman Sachs
Websitewww.marcus.com
Launched: 2016
Category: Online bank
Notable Milestones: 2+ million customers and $35 billion in deposits.

Marcus’ loans range from $3,500 to $40,000 at rates of 6.99% to 25%. The average loan in 2018 was $15,000 over four years with a 12% interest rate, according to Bloomberg BusinessWeek. That leaves plenty of margin room even with its online savings rate up at 2.25% (as of January 2019).

5. N26 — Platform Maestro

Websiten26.com
Launched: 2015
Category: Mobile bank
Notable Milestones: 2.3 million users and $1 billion in deposits.

6. Revolut — The Amazon of Banking

Website:www.revolut.com:
Launched: 2015
Category: Mobile financial provider

Notable Milestones: 3 million customers — both consumers and businesses. Opening about 8,000 accounts per day. 1.2 million monthly active users. Monthly transaction volume $3 billion. Received European banking license in December 2018. More than 60,000 U.S. customers on Revolut’s waiting list.

7. SoFi Money — Join The ‘Waitlist’

Parent Company: Social Finance, Inc.
Websitewww.sofi.com
Founded: 2011 (Sofi Money Beta Launch, June 2018)
Category: No-fee Mobile banking account

8. Varo Money — Almost OCC Approved

Websitewww.varomoney.com
Founded: 2015
Category: Mobile banking/money management app in partnership with the The Bancorp Bank.
Notable Milestones: First mobile-only bank to get preliminary approval for a national bank charter.

Walsh feels Varo Money is particularly suitable for the 70% of the people they initially surveyed who are “hands-off creditworthy Millennials.”

P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A

It said its net asset value (NAV) rose by 0.78 per cent in the final month of the year, amounting to a total 5.2 per cent return in 2018, as the fund sold off a number of poorly performing loans, according to its December newsletter published today.

15 Minute Mortgages? Meet Molo – The New Fintech Aiming To Shake Up The Market (Forbes), Rated: A

Francesca Carlesi is the Co-Founder and CEO of Molo, a new, super exciting fintech start-up, aiming to reimagine how people get mortgages forever. She was originally a University professor, envisioning pursuing an academic career, before quickly joining McKinsey & Co., immediately after finishing her Ph.D. Molo is her first experience as a start-up entrepreneur after a long career in the finance and banking world. Here she discusses how she made the transition and found the journey so far.

Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A

57 million people in the US freelance and 30 million or so of those are micro and small businesses. Small businesses use approximately a dozen apps and pieces of software to manage their finances. From a bank account to payments to QuickBooks to factoring, microbusinesses spend 365 hours a year reconciling the data between all their financial tools.

1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A

Key Findings

  • 1 in 4 Americans considers funding to be the biggest obstacle.
  • More women say not knowing how to run a business is a challenge than men.
  • Millennials ages 25 to 34 are the most afraid of failure.
  • 1 in 3 Americans lacks a strong business idea to begin with.
Source: Valpak

Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A

The fintech consolidation is starting, at least in the financial data side of the business, with Plaid recently announcing an 

Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A

United Kingdom

Due diligence on P2P platforms (FT Adviser), Rated: AAA

In the immediate aftermath of the credit crunch, politicians enthused about the new crop of peer-to-peer providers and even created the Innovative Finance Isa.

UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA

The Open Banking Implementation Entity (OBIE) has published its Operational Guidelines and accompanying checklist to help financial institutions (FIs) better navigate Open Banking, per a press release.

With the guidelines, the OBIE aims to clarify the regulatory requirements for a dedicated interface, as set out in the revised Payment Services Directive (PSD2), RTS, EBA Guidelines, and Financial Conduct Authority (FCA) Approach documents.

Source: Business Insider Intelligence

Read the full report here.

Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A

The digital-only bank, which expects to top one million customers this year, said the new account is a simple was to ‘send and receive euros for free’.

Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A

Alternative credit assessment innovator Aire has picked up $11 million in new funding. The London-based company, which demonstrated its Aire Credit API at FinovateEurope 2015, said the new capital will support the continued development of its credit insight engine, as well as support expansion in the U.S.

AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A

A new service has been set up for people in debt, giving them the power to let advisors see their bank accounts in order to offer quick and accurate advice.

The service is a tie-up between fintech bank transactions firm AccountScore and The Insolvency Panel launched this month.

Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A

Small businesses accounted for 22 per cent of the UK’s economic growth in 2017 according to Octopus Investments High Growth Small Business Report. These SMEs, which comprise less than one per cent of UK companies, created one in five jobs in 2017 and hold a wealth of potential for our economy. When it comes to the future of the UK business landscape, it seems that the best things do come in smaller packages.

SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A

SME business account Anna has received an investment of £8.5 million from Kinetik as it prepares to launch new tools and products.

What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A

The cryptocurrency winter has been one of many contrasts. While some firms have gone out of business and shut down, some have thrived. Celsius Networks belongs to the latter.

Based in London, the firm launched just six months ago, but it has grown by leaps and bounds. It has lent over $630 million in loans, predominantly in cryptocurrencies.

Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A

AAVE, a UK-based FinTech Startup, today announced a new release for its crypto lending marketplace ETHLend. The release introduces the capability for the ETHLend users to use their Bitcoin holdings as a collateral to borrow funds for spending.

Exclusive: P2P firm shuts platform (AltFi), Rated: B

The UK Bond Network, a p2p platform for corporate bonds, is closing as of today Monday 4 February 2019, according to the firm.

China

From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA

Financial services group CreditEase runs an app through which its private banking clients can be connected to needy women farmers in China’s rural interior. It’s a remarkable initiative taken up by 200,000 farmers and shows what can be done with low-level credit. But how does the risk management work?

European Union

PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA

German financial technology group Raisin has raised $114m in new funding from high-profile backers including Index Ventures and PayPal, in one of the largest fundraisings to date in Europe’s emerging “wealth tech” space.

ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A

Dutch bank ING is linking its small business (SMB) customers to alternative lending marketplace Funding Options, the firms said on Monday (Feb. 4).

The partnership means Funding Options has launched services in the Netherlands, expanding beyond the U.K. for the first time, said reports in Crowdfund Insider. Approximately 1.8 million SMBs in the Netherlands will gain access to Funding Options via ING Bank.

The Irish fintech startups disrupting their industries (Irish Times), Rated: A

Also based at NOVA is Initiative Ireland which aims to give cautious investors lower-risk access to the Irish property market. With poor interest rates, investors face the perennial problem of what to do with their money. Risk takers will always have options, cautious investors less so, and this is Initiative Ireland’s sweet spot. It is offering returns in the order of six to eight per cent to those investing in its novel peer-to-peer lending platform for developers building social and affordable housing.

Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A

The European challenger bank in Portugal, Banco BNI Europa, has become a customer of NDGIT, provider of the API platform for banking and insurance in Europe.

BNI Europa implements “PSD2 Ready”, NDGIT’s smart standardized software solution following the Berlin Group RTS standard, to fulfil all PSD2 requirements. This cooperation is a milestone for the future development of Open Banking in Europe and for BNI Europa the next step in their company’s development.

International

International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA

Milestones achieved this month (total volume since launch):

Source: P2P-Banking

Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA

While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board’s (FSB’s) Global Monitoring Report on Non-Bank Financial Intermediation 2018.

Source: Business Insider Intelligence

Why VC Is The Answer To Falling Returns (Forbes), Rated: A

In uncertain times, VC offers the advantage that its performance is completely uncorrelated with public equity markets. Last year, both the US and Europe saw record VC investment, reaching over 

Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A

Those of us who work in finance can’t imagine life without a bank account. But for the world’s 1.7 billion unbanked adults, this is a reality. In the U.S., 33.5 million households are either unbanked or underbanked and lack the ability, criteria, or financial literacy to access banking services. Without access to savings and credit, these people often live — and remain — in a cycle of poverty.

In the U.S., nearly 95 percent of adults have a mobile phone and 80 percent of those are smartphones. And since they’re not tied to traditional banking norms such as branches, ATMs, and credit cards, the unbanked are more likely to adopt digital banking via their phones.

TymeBank in South Africa uses AI to help people learn about their money and how to save. It teaches people about credit scores and rewards them for good financial behavior — TymeBank offers an amazing 10 percent interest rate on savings accounts for customers who can define specific financial goals they want to hit, and then contribute to them.

Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A

SANCUS will start accepting euro-denominated loans within the next few months, to help it expand its investor base.

The alternative business finance provider is also planning to establish a new base in the Cayman Islands by the end of 2019, a move which would allow it to accept dollar-denominated investments as well.

Revolut team ups with WeWork (AltFi), Rated: B

The new partnership will provide Revolut for Business customers with 3 months free of hot-desk space at a WeWork co-working space.

Australia

Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A

Peer to peer lending service provider Wisr has targeted disillusioned big bank customers in its new ad campaign.

APAC

Diversify investments in P2P lending, youths urged (The Star), Rated: AAA

Technology-driven peer-to-peer (P2P) lending is becoming a popular investment choice among young investors, but the anticipated slowdown in the economy this year also raises the risk of losing money.

To protect their investment, a P2P financing platform operator said that investors should spread their investment into as many deals as possible.

Africa

DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA

The P2P Crypto loan services allow users to retain their assets in case they predict the concerned cryptocurrency value might appreciate in the future. DexAge enables users to stake their crypto assets as collateral and acquire a loan of the same value to expand their investment profile.

Canada

Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA

iBank Digital Asset L.P. (“iBank Digital”, “iBankEx” or the “Company”) has officially launched Vancouver’s first peer-to-peer (P2P) OTC digital currency trading platform on iBankEx. (www.ibankex.io) This launch is supported by Huobi Cloud (“Huobi Cloud”) technology, which has officially entered the Canadian market in 2019 with 120 exchanges around the world.

iBank Products & Services:

Fiat Lending – A decentralized global lending network connecting financial institutions worldwide by offering crypto backed loan business.

Crypto Lending – iBank provides crypto loans collateralized by your crypto assets in BTC/USDT with security and confidentiality.

Authors:

George Popescu
Allen Taylor

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

Wednesday June 21 2017, Daily News Digest

Mountain View

News Comments Today’s main news: DBRS takes rating actions on SoFi consumer loans. Relendex secondary trading platform tops 1M GBP. Xeenho closes new round of financing. Today’s main analysis: The current state of MPL in Japan. Today’s thought-provoking articles: Vanguard takes robo-advice to $65B. Female entrepreneurs more cagey about post-Brexit. 5 ways financial apps are changing banking. United States […]

Mountain View

News Comments

United States

United Kingdom

China

European Union

Australia/New Zealand

Asia

Africa

News Summary

United States

DBRS Takes Rating Actions on SoFi Consumer Loan Programs (DBRS), Rated: AAA

DBRS, Inc. (DBRS) has today reviewed seven ratings from four SoFi Consumer Loan Program U.S. structured finance asset-backed securities transactions. Of the seven outstanding publicly rated classes reviewed, six were confirmed and one was upgraded. For the ratings that were confirmed, performance trends are such that credit enhancement levels are sufficient to cover DBRS’s expected losses at their current respective rating levels. For the rating that was upgraded, performance trends are such that credit enhancement levels are sufficient to cover DBRS’s expected losses at their new rating level.

RATINGS

Issuer Debt Rated Rating Action Rating Trend Notes Published Issued
SoFi Consumer Loan Program 2016-1 LLC Class A Notes Upgraded AA (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-2 LLC Class A Notes Confirmed A (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-3 LLC Class A Notes Confirmed A (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-5 LLC Class A Notes Confirmed A (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-2 LLC Class B Notes Confirmed BBB (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-3 LLC Class B Notes Confirmed BBB (sf) Jun 20, 2017 US
SoFi Consumer Loan Program 2016-5 LLC Class B Notes Confirmed BBB (sf) Jun 20, 2017 US

Vanguard rides robo-advice wave to $ 65B in assets (InvestmentNews), Rated: AAA

While much of the financial services industry has been fretting for the past few years over how to compete in the age of digital-advice platforms, The Vanguard Group Inc. appears to have cracked the code in a steady climb to more than $65 billion under management on its two-year-old robo.

Vanguard’s Personal Advisor Services, which is four times the size of the next-largest robo-platform, is a hybrid that incorporates human advisers and is starting to look like the blueprint for the way to leverage digital advice.

CleanCapital Closes Investment Round Led by FinTech Leaders and Pioneers (CleanCapital Email), Rated: A

CleanCapital, an online marketplace for clean energy investing, announced today the closing of the first round in Series A funding, as part of an ongoing capital raise. The new capital will allow CleanCapital to implement their technology roadmap and continue scaling operations, growing its team, and expanding opportunities for clean energy investing. CleanCapital’s proprietary platform has benefits that are two-fold, by creating opportunity for investment and increasing ease for project owners to exit their current portfolios. By reducing barriers both for the flow of capital and access to investments, CleanCapital is accelerating clean energy deployment.

To date, the team has financed over $40M of solar projects and more than 20 MW in operating solar assets. They have also received funding from industry leader John Hancock Life Insurance to finance numerous assets. CleanCapital has created a unique algorithm to efficiently scrub and value projects so that only the best investment opportunities are included in investment portfolios.

Investors include FinTech leaders and pioneers such as Ron Suber, President of Prosper Marketplace, Jon Barlow, Founder of Eaglewood Capital Management, and Bradley Pattelli, Former Chief Investment Officer of LendingClub. In addition, the company was recently selected to be featured on leading startup fundraising platform SeedInvest which historically has accepted just 1% of startups applicants.

Transparency A Growing Concern for Alternative Investing (Plan Sponsor), Rated: A

The study shows transparency continues to lead all investment considerations and has significantly grown in importance following the financial crisis of 2008.

“Degree of transparency” was cited as very important by 63% for alternative and 62% for traditional investments. It was also cited as the most important post-investment consideration by 21% for traditional assets and 17% for alternatives, compared to 9% and 3%, respectively in pre-crisis.

Tech Gap Widens Between Haves, Have-Nots (Financial Advisor IQ), Rated: A

The gap between independent RIAs who are keeping up with evolving technologies and those who aren’t is widening. And that’s stunting growth for advisors who aren’t acting proactively to keep on top of a rapidly evolving marketplace.

At least that’s what Fidelity finds in a new study published Tuesday looking at industry trends in high-tech adoption. As part of its research into firms using the latest electronic tools – including everything from interactive website software to advanced CRM programs and integrated back-office systems – the custodian has developed a list of tech-savvy “eAdvisors.”

Fintech Brings Residential Real Estate To The Web (NASDAQ), Rated: A

However, there are a number of limitations that come with completing the mortgage application process entirely online. You likely won’t be able to complete the process online if you’re applying for a jumbo mortgage (for which the limit is $417,000 in most of the United States); if you’re self-employed with various sources of income; if you or a tax advisor manually prepared your taxes; or if you don’t have online accounts with all of your financial institutions.

Still, the option to purchase real estate quickly and easily online is very attractive for foreign buyers, investors, and modern, web-savvy homebuyers. Although completely online real estate transactions only represent a small fraction of the more than $2 trillion in annual real estate transactions worldwide today, the demand is growing, and it seems likely that a substantial percentage of homes will be purchased completely online within just a few years.

Selling a home online offers a number of notable advantages. Perhaps most importantly, you avoid using a real estate agent so you don’t have to pay the usual 3% to 6% commission.

The key disadvantage of a fully online transaction, of course, is the possibility of making some kind of mistake during the process that could cost you a chunk of money, or even the chance to purchase your dream home.

Suretly Brings Crowdvouching to the Lending Market, Announces ICO (Inside Bitcoins), Rated: A

New York-based financing startup Suretly has announced that its crowdfunding campaign is set for July 2017 launch. Suretly offers a safe new way to obtain a personal loan, through its unique ‘Crowdvouching’ platform.

Unlike traditional P2P lending platforms which require investors to co-sign for a percentage of the loan, Suretly’s crowdvouching system requires a much larger number of backers to secure the loan and in doing so, substantially reducing the individual risk of all parties. Suretly is currently focused on short-term loans, and the platform has already been called the “Tinder for Microloans.”

The company’s ICO will give all investors an opportunity to purchase the platform’s SUR tokens and contribute towards the growth of the crowdvouching project.

GDS Link Joins Marketplace Lending Association (PRWeb), Rated: B

GDS Link, a global provider of risk management solutions and consulting for multiple verticals within the financial services industry including marketplace lending, retail finance, alternative financial services, credit card, auto, and business leasing, today announced that it has joined the Marketplace Lending Association (MLA) as an associate member.

Lending Club’s Dolan Joins Metromile in California as Chief Financial Officer (Insurance Journal), Rated: B

San Francisco, Calif.-based Metromile has named Carrie Dolan chief financial officer.

Dolan most recently served as CFO of Lending Club, an online credit marketplace connecting borrowers and investors. Prior to Lending Club, Dolan was with Charles Schwab & Co, where she was senior vice president and treasurer and CFO of Schwab Bank. Early in her career, Dolan held various financial positions at Chevron.

Eight Fledgling Fintech Providers Win Capital with CFSI Awards (Paybefore.com), Rated: B

Eight fledgling fintech companies have won $250,000 each from the Center for Financial Services Innovation.

  • Blueprint Income, which offers a pension anchored on “a simple, pre-determined income stream backed by insurance companies.”
  • Dave, whose product “alerts consumers ahead of an upcoming overdraft and can instantly advance up to $75 at 0 percent interest to prevent overdraft fees.”
  • EverSafe, which monitors bank and investment accounts, credit cards and credit reports, and then alerts older consumers and their relatives to irregular activity.
  • Grove, which offers personalized financial advice and comprehensive financial plans that are “within reach for everyone.”
  • Nova, a firm that “has built the world’s first cross-border credit reporting agency by building data partnerships across the globe,” a product that can help immigrants gain credit.
  • Point, described as “an alternative to traditional home equity loans and home equity lines of credit.” The company buys into a fraction of a consumer’s property, paying today for a share of the home’s future appreciation.
  • Token Transit, a mobile app that “enables low-income riders to have convenient access to the transit passes they need. Riders are able to pay using a credit, debit or a prepaid debit card.”
  • Tomorrow, which provides “long-term financial security to busy millennials and working families.”
United Kingdom

Relendex’s Secondary Trading Platform Tops £1 Million (Crowdfund Insider), Rated: AAA

Relendex, a secured peer to peer lending platform, has announced that its secondary market trading has surpassed the £1 million mark.

Relendex says this indicates that lenders have embraced the secondary platform. On the Relendex Resale Marketplace investors are able to buy and sell Loan Parts at par with no fees charged.

Female entrepreneurs more cagey about post-Brexit prospects (P2P Finance News), Rated: AAA

A poll by the peer-to-peer lender shows that less than half as many female business owners are confident about the success of their businesses post-Brexit, compared to their male counterparts.

The research, conducted by RateSetter Business Finance, has revealed that only 10 per cent of women business leaders believe that leaving the EU will be positive for their business.

This contrasts with 21 per cent of male business owners who have an optimistic outlook about their ventures after Brexit.

Additionally, 32.7 per cent of female business owners want to find a lender that understands their business and business model, compared with just 19 per cent of men.

TrueLayer raises $ 3M Series A to provide fintech companies with easy access to bank APIs (TechCrunch), Rated: A

TrueLayer, a London startup that’s built a developer platform to make it easy for fintech companies to access bank APIs — and ride the PSD2 gravy train — has raised $3 million in Series A funding. The round was led by Anthemis Group, with participation from existing investor Connect Ventures, and will be used by TrueLayer to expand its team and increase coverage of supported banks before opening up beyond beta testers later this year.

Launched in private beta in February, the TrueLayer developer platform currently supports things like account verification, KYC processes, and accessing transactional data for account aggregation, credit scoring, and risk assessment. It is available in the U.K. and Simoneschi says TrueLayer will expand to other EU countries later in 2018.

Soldo, a London fintech startup that offers a multi-user spending account, raises M led by Accel (TechCrunch), Rated: A

Soldo, the London-based fintech startup that offers a multi-user spending account, first launched for consumers and since tailored to businesses too, has raised $11 million in Series A funding. Venture Capital firm Accel led the round, with participation from Connect Ventures, InReach Ventures, U-Start and R204 Partners.

Creathor Venture and private investors invest CHF 2.5 million in PropTech company Allthings (IT Business Net), Rated: A

Creathor Venture, a pan-European venture capital firm, together with a circle of experienced private investors from the real estate industry invest CHF 2.5 million in German-Swiss property tech company Allthings Technologies AG. Allthings connects tenants, owners, property managers and developers of living and commercial property through a modular communication and service platform.

Zorin hires ex-Funding Circle underwriter (Bridging & Commercial), Rated: B

Colin Chung (pictured above) has been recruited as an associate director in the credit risk team, while Katy Katani (pictured below) has joined as head of business development.

Colin was previously at Funding Circle, where he was a senior property underwriter, and has over 10 years of experience in real estate finance.

China

Xeenho Closed a New Round of Financing for its Business Transformation (Xing Ping She Email), Rated: AAA

On Jun 20th, Xeenho announced to have finished their third round of financing. This round of financing was led by Hongshang Capital, with Jade Value and Hunan Culture & Art Industry Group participated. The financing amount was again reached to tens of millions of yuan. All the funds have been in place, and they are in the process of handling business changes.

Started as one of the first P2P loan funds in China, Xeenho has an accumulated volume of nearly 3 billion RMB to date. The excellent risk control and the big data application in fintech constitute the core value of Xeenho. Based on its self-developed IFRM risk control and big data system, Xeenho keeps the record of Zero Bad Debt, which makes the company developed as a guidance for due diligence, P2P rating, research report, P2P asset portfolio allocation for clients and investors.

In 2016, Xeenho launched a new Robo-Adivisor product – Xeenho Zhi Tou, attracting capital for different P2P platforms, and Xeenho provides guarantee in this process. In the late of the same year, Xeenho set up self-media platform – Xing Ping She, aiming at building an industrial ecosphere and providing services which is specially designed for specific fintech companies.

This A round of financing would be a fresh start to Xeenho. Dr. Yang Li, the co-founder and CEO of Xeenho said, “After A round of funding, we will continue to focus on business in big data mining, equity investment and information consultation, and explore to develop new business at the same time. We hope to realize the development of collectivization in the next three years, so as to build a complete system of financial ecology and become one of the leading fintech companies.”

European Union

Bank to the future: five ways financial apps are changing banking (Banking Technology), Rated: AAA

  1. Banks will face stiff competition from new wave of fintech start-ups – In the UK it is firms like Bean, Ernst, Moneybox, Pariti and Plum, to name just a handful, and this picture is repeated across Europe.
  2. New open data initiatives will mean unparalleled access to consumer data – In the UK, PSD2 is being delivered by the Open Banking project. Alongside this the Treasury is running the Pensions Dashboard project, which will liberate customer data on long-term retirement savings in the same way.
  3. New services will revolutionise who people trust for financial advice
  4. Personal finance dashboards (PFDs) will open the way for long-term savings as well as short-term financial management – Pensions dashboards already exist in many other European states including Denmark, the Netherlands and Sweden.
  5. The workplace will be key to the new market – In practice, the workplace is likely to be a highly successful channel for such services complementing employers’ pensions and employee benefits delivery. In the UK, auto-enrolment means nearly all employees will soon be members of a workplace pension scheme.
Australia/New Zealand

Robots closer to getting go-ahead to give financial advice to humans (Stuff), Rated: AAA

Getting personalised financial advice from a “robot” may be a step closer to becoming reality.

The Financial Markets Authority has asked for feedback on whether it should use its powers to allow personalised financial advice generated by a computer programme or algorithm.

Under current law, personalised advice, which takes into account an individual client’s financial situation and goals, can only be delivered by a human being.

Asia

The Current State of Marketplace Lending in Japan (Lend Academy), Rated: AAA

Marketplace lending growth in Japan has been slow compared to the U.S., Europe and China but that has started to change in the past three years. The market has been almost doubling each year and we expect this trend to continue through 2017. Investment volume was $140 million in 2014, $310 million in 2015 and $530 million in 2016. We estimate it to reach $1 billion this year.

Marketplace lending, also commonly referred as “social lending” in Japan, started as p2p lending around 2008 but struggled due to high default rates, which sometimes reached 30%. Since Japanese lending law prohibits interest rates above 15% in most cases, a 30% default rate was not sustainable for those businesses.

The industry average APR increased to 8.4% from 5.7% in two years, mainly due to newer entrants that were charging higher APRs. Default rates in the past three years have been close to zero due to platforms being more selective on who they lend money to.

Based on our research, average spread (i.e. margin) for crowdfunding platforms in Japan is 4%-5% annually. Typically crowdfunding platforms are lending at 13% and funding at 8%. Based on this margin, a crowdfunding platform needs to service portfolio of between $50 – $100 million to be break-even. Only a few crowdfunding platforms have reached this scale, however given the current market growth, many players will achieve this volume after 1-3 years of being in business.

Africa

Consumer lending has dropped to ‘almost zero’ under new regulations – Rainfin CEO (Ventureburn), Rated: AAA

Consumer lending on marketplace lending platform RainFin has ground to a halt since the new National Credit Regulations threshold came into effect on 11 November, the company’s chief executive Sean Emery said yesterday.

Under the new threshold, lenders who lend even one cent to consumers have be registered with the National Credit Regulator to do so.

Authors:

George Popescu
Allen Taylor

The 2017 wave of Lending Fintechs: Alt Lending 3.0

PitchIt 2017 finalists

The PitchIt startup awards is one of the best and most exciting parts of the LendIt conference. This year, there were eight finalist competitors who met in front of hundreds of investors to pitch. Four judges picked the ultimate winner, Nova. Below are the profiles of Nova and the seven other PitchIt finalists. Nova – […]

PitchIt 2017 finalists

The PitchIt startup awards is one of the best and most exciting parts of the LendIt conference. This year, there were eight finalist competitors who met in front of hundreds of investors to pitch. Four judges picked the ultimate winner, Nova. Below are the profiles of Nova and the seven other PitchIt finalists.

Nova – Credit History for Immigrants

Nova is the world’s first cross-border credit agency. Many immigrants come to the United States with no credit history. They may come from a place where credit is not an option. In many countries of the world, banks do not issue credit cards. There may not even be many, if any at all, banks. Merchants do not offer purchases on credit, so when these immigrants land on U.S. soil, their ability to interact with the economy is limited by the options they had in their native countries. Nova solves that problem.

It started as a research project at Stanford University. U.S. property managers run credit and background checks on applicants to screen for potential risks when leasing or renting housing units. Those checks typically do not include overseas credit checks. With Nova, property managers have that ability. Not only can U.S. landlords check overseas credit, but they can also report negative actions so that the credit report is affected in the applicant’s home country.

Lenders can use Nova to check the credit history of applicants that come from non-U.S. countries. While many countries around the world do not have FICO scores and credit bureaus, that does not mean citizens of those countries do not have credit histories. Nova gains access to those histories.

Aella Credit – Instant Credit for Africans

Aella Credit’s focus is on Africa where employed workers may or may not have access to credit. Through Aella, employees can access alternative credit solutions through their employers.

Companies register on the Aella Credit platform and give the company access to employee records. Through an API call, Aella Credit can loan money to employees who access the platfom through their mobile phones. In most cases, they can have access to much-needed cash at low interest rates in a couple of minutes. They pay back the loans in payroll deductions authorized during the application process. Over time, their credit improves as Aella Credit reports their payment history to the credit bureaus.

Investors make loans and are almost guaranteed payment due to the payroll deduction process. Also, the default rate is low for the same reason. Everyone wins.

Alloy – Verifying Identities

Identity verification has been a major issue for many people and companies in recent history. As the world grows more and more digitized, identity verification will become an even bigger concern. Alloy makes the process seamless.

Through an API call, Alloy verifies identity by checking multiple sources of information. Using financial technology for financial service companies that want to fight fraud, they are able to verify identities quickly and accurately to prevent loss due to fraud and dissatisfaction.

Float – Providing Access to Credit Quickly and Easily

Float‘s mission is very simple and straightforward. It’s a mobile app that allows people to apply for a line of credit and be approved in just a few minutes—as in, under five. The money being loaned is sent directly to the app and the borrower can use that money from the app. In other words, it’s digital currency.

Instead of using FICO scores, the company bases the amount of credit on what they believe the applicant can afford. Credit lines begin at $50 and go up to $1,000, amounts that no bank would touch. Another anomaly is the payback plan. Whatever applicants borrow must be paid back by the 21st of the following month. Therefore, it’s more like a payday loan than a traditional line of credit, but instead of standing in line in a seedy part of town, applicants can borrow money while sitting in their living rooms.

Qwil – Unlocking Contractor Earnings

As a freelance writer, I’ve experienced times when a slow payment made it difficult to get through the month. It’s an experience that every contractor in any kind of business has experienced. With Qwil, contractors can get through those difficult months without stress. Think of it as a cash flow plan based on the quality of your invoices.

When you invoice your clients—whether it be Net 30, Net 60, or Net 90—this is reflected in your Qwil account. Contractors simply cash out on future invoice earnings and go on about their business.

RealAtom – Helping Commercial Real Estate Borrowers Find The Right Lender

There is a lot of innovation going on in real estate lending right now. Commercial real estate is one area where could be a lot more improvement. RealAtom is here to fill in some of that gap. Their niche is helping borrowers find the right lender.

True the marketplace lending format, both borrowers and lenders sign up on the platform. Borrowers post their loan details and documents for review while lenders specify their applicant criteria. RealAtom makes the connection through the platform, matching lenders with borrower requests and borrowers with lender criteria. They deal in loan amounts from $100,000 to $100 million providing access to bridge, mezzanine, and long-term permanent loans. They’ll even work with loan brokers.

StackSource – Commercial Real Estate Lending

Another marketplace lending platform specializing in the commercial real estate lending space, StackSource allows project managers and real estate developers a way to access funding for their projects by giving them a place to upload their project details and find lenders willing to fund those projects. The basic service is free, but there is an upgrade option that allows developers to pitch their projects to more lenders for a fee. It’s only .3% of gross loan value, which is due at closing. That still beats those hefty broker fees.

WeTrust Platform – Providing a Trusted Lending Circle

WeTrust is an online ROSCA, which stands for Rotating Savings and Credit Association. It’s a simple idea that has caught on in several countries under different names, but it allows a group of people to pool their money together for a common purpose and reap the benefits together.

ROSCAs are peer-to-peer instruments that allow the members to use their pooled money to gain access to credit, make a purchase, fund a business, or whatever they agree upon. They contain all the benefits of insurance as well as credit instruments. Members earn interest on their pooled money, but members rotate the benefits so that not all of them gain access to the money in the pool at the same time. In other words, they rotate the shared benefits to distribute them fairly and evenly so that the entire membership wins.

WeTrust operates in India, Latin America, China, and the U.S. with plans to expand to other countries soon.

Author:

Allen Taylor

Moving Credit Data Across Borders With Big Data

cross border credit data

One of the challenges facing anyone moving to another country is financial. You could have a great credit history but no way to leverage that credit to get housing, transportation, or consumer goods. To solve that problem, a team of internationals at Nova is creating a way to access global consumer credit data. Nicky Goulimis […]

cross border credit data

One of the challenges facing anyone moving to another country is financial. You could have a great credit history but no way to leverage that credit to get housing, transportation, or consumer goods. To solve that problem, a team of internationals at Nova is creating a way to access global consumer credit data.

Nicky Goulimis grew up in the UK. Misha Esipov emigrated to the U.S. from Russia. Loek Janssen migrated from the Netherlands. They met as graduate students at Stanford and know first-hand what happens when your good financial records don’t cross the border with you. So they created the world’s first and only cross-border credit bureau.

“I grew up in the UK and consulted for Bain & Co., covering post-crisis distressed banks,” Goulimis said. “Then I switched gears and worked for the Ministry of Agriculture in Ethiopia and an NGO in Uganda. I focused on financial inclusion. Seed financing means actual seed for me.”

Coming to the U.S. for grad school and her MBA, she met Esipov, another MBA student, and Janssen, who earned his master’s degree in computation math and engineering. The trio worked on Nova for two years.

“We focused on access to loans by having great performance elsewhere,” Goulimis said, “working on funding, prototyping, success, and traction. We asked ourselves, ‘How can we make this a real opportunity investment?’”

Nova founders joined Y Combinator in the summer of 2016. In September, they raised $3.2 million.

“In my case,” Goulimis said, “I lived in the UK and am now in the U.S. We can give lenders data from the UK via instant API. Moving data across the border is under very complex regulation, but you can see the score and decide to underwrite a loan. If I default on the loan and move back to the UK, we report that on both sides of the Atlantic.”

Today, Nova has integrated its reporting to Mexico and India as well as the U.S. and the UK. They’re negotiating to provide data in other countries.

“We have discovered how to move data across borders,” Goulimis said. “What is the beauty of our model is the timing. We are supported by global credit reporting agencies. World Bank has been pushing for more transparency by opening credit bureaus in all countries.”

While others have tried before to establish a global credit bureau, it’s a complex thing to do. Nova has to seek the blessing of each country one by one and figure out the complex local regulatory environment case by case. That has to be done before any data can cross borders from one country to another.

“We are full-profit, but we are enabling immigrants to access credit,” Goulimis said.

The company pitches itself as a third party. For example, a credit bureau in Germany is able to monetize data overseas to fulfill its mission. In the dynamic between other credit bureaus, Nova is an independent party.

“We can work with all of them. We don’t compete,” Goulimis said. “We are not building our own credit database. We are aggregators. We acquire the data from overseas, then we have to adapt the data. Each lender wants one standard format, so we need to standardize it. We also need to make data legal in the U.S. (i.e. nothing more than 10 years old, no gender statuses, etc.). We do that cleaning and post-processing of data.”

Nova calculates a U.S.-equivalent credit score using data science. Fundraising has gone well, according to Goulimis.

“We have clients in the smaller FinTech space focused on immigrants,” he said. “We are starting to work with alternative lenders, as well.”

After two years of operation, Nova experienced a positive cash flow and 11 employees. Goulimis said they are looking for more clients.

“There’s very interesting rhetoric right now on immigration and financial fronts,” he said. “We play into these macro trends in a complex space, and we are building something unique. We would like to show it to a broader audience.”

Authors:

Written with Nicki Jacoby.

Allen Taylor